To find defects and their root cause in semiconductor devices has become more and more difficult as chip size dramatically drops. A novel method combining FIB sequential cross-sectioning and TEM is described in this paper. This combination has provided a powerful tool for defect mechanism analysis. FIB slicing through a failed cell can be controlled to a precision of 0.1 micron. Passive voltage contrast imaging with FIB enhances defect detection. After a defect is found, in-situ TEM sample is prepared with FIB milling. By putting together the series FIB images along side with the TEM images and its associated high resolution EDS data, the detailed defect formation mechanism was discovered and feedback to process engineering for process improvement.